Navigating Global Business: Factors, Challenges, and the Role of Culture - Paper Example

Leading business globally is something that most businesses in the world want to achieve. It not only enlarges the latent market but also protects businesses against the risks that are caused by a likely decline in the local market. Expansion of businesses internationally has become achievable and easier in the current world, due to globalization reforms, the digitalization of technology, and accessible and easy payment gateways. Each year thousands of organizations and businesses, gain international customers and spread worldwide. However, just a few businesses that re able to beat the global competition and generate space for their trademark in the latent market. The international expansion journey can also be treacherous. Between learning new regulations and laws, establishing a new client base, becoming acquainted with the local clients, and gaining trustworthy partners. However, there are factors that are considered before expanding a business in the global market.

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First, the capital and investment of a business need to be monitored and studied. Global development does not just happen overnight, and in most circumstances, it is not a cheap procedure. Money and time are needed to take a business to another level across geographical boundaries. Therefore, for a business to develop internationally it needs to have enough capital to successfully invent in another region’s business market. In cases where a business does not have adequate capital, there is a need to search for shareholders and investors who can fund a business to undergo expansion (Welch, 2014). Ultimately, these considerations together with the correct amount of money, local market awareness, time, and dedication; could assist in the expiation of a business to grow internationally beyond its level.

Second, the organizational structure should be considered. It is evident that businesses cannot operate or function without the proper business and organizational plan. A global business needs to have comprehensive and clearly implemented strategies. This strategy includes searching for available raw materials, setting up sub-branch offices in foreign places, hiring local representatives and employees, and searching for buyers for the products if the business deals with production. Business owners need to take into consideration this strategy as they are essential and without them, in place, a business would not work. Counsel and help would be given by the existing local representative and employees in the new marketplace.

Third, to monitor the product quality in a business, there is a need to consider if the product is introduced in a foreign market that has demand. What are things that need to be discovered? Firstly, is the sustainability of the produce in the marketplace and its, demand. Promoting a product in a region where it is not used or does not have demand, would not be profitable for a business. Hence individuals need to be careful as they choose their location for global development. Secondly, there is a need to check on the availability of the same product at cheaper rates. If there are local companies that produce the same products at a cheaper rate it would be hard for the country to accept imported products. This means that individuals should examine the accessibility of the product in the target market, the price of the product or service being sold, and the quality of products in the local market.

Fourth, culture and language differences need to be put into consideration. In the local market expansion of businesses is easily accomplished, as there are no cultural and language barriers. Nevertheless, overcoming these obstacles in the international market can become stimulating, if an appropriate plan is not followed (Bromley & Meyer, 2015). In order for a business to be successful in a foreign market, its workers need to either study the new language or search for representatives who would promote the business consequently. Having adequate info about the culture of the country or region where the new business is to be positioned is essential as cultural variances can often hamper business growth. For example, there are numerous cultures where bold and outright marketing policies can flop but understated clues can work miracles for retail business. Therefore, if a certain product is sold in a forbidden culture or religion, or if the product is promoted in a way that is not considered suitable by the local people, they would not get the motivation to buy the services and goods. Cultural effects are important in a business as they help predict the demand for a product among the people.

Finally, the quality of services and products should be highly considered. High-quality services and products are needed in international business due to the competition in the market. Therefore each market has standards of assurance and quality that need to be met to create a stronger bond with the customers. Alongside the quality of products, a certain amount of steadiness needs to be maintained in the values of quality. For the manufacturing process business, they need to maintain constant high-quality products at all times, which makes the reputation reliable and attracts referral customers. So as to ensure quality, there is a need for severe testing of the product quality at times. Like the Starbucks company consider the quality of their products before opening new shops.

Importance of Culture in a Global Business

In global business, culture is a sensitive and essential future. As additional companies rise and the worldwide market becomes more available for international, cross-cultural teams and small businesses are flattering further mutual. This indicates that it is vital for businesses to comprehend their foreign market for them to succeed in the international market. Culture is defined as the customs, social behavior, and ideas of a particular society or person (Peng, 2016). In the context of a business, culture is considered as the common behavior that is accepted professionally in one region compared to another. A culture that is accepted in a certain region may be different from the methods used by businesses foreign. Consequently, recognize how principles can affect global business, somewhat of which would be agreed in order to evade mistakes among clients and colleagues and to make certain that companies dowry themselves to their novel marketplace in the finest way possible.

The effect of different values in global business is vital for building effective international associations. This issue is founded on the novel global industry viewpoints and what is vital to reflect in developing a global business policy. Companies have the challenge of expanding and presenting into novel prospects and it is actually significant to fully understand those new bazaars in which the corporation wishes to grow. Today, a company’s business associations are increasingly more global, and effective cross-cultural communication needs have been essential. Knowing new cultures takes a lot of time for integration comprehension and assimilation and is definitely the key to effective business growth globally.

Contrast between U.S and Chinese culture

In the business practices field, there are few differences between China and the U.S. business culture. The most common cultural difference between the two countries is the interpersonal mingling of representatives and clients. In the U.S. the mingling practice is often considered to be controversial and unethical. Whereas in China this practice is heavily accepted and encouraged as it is part of the developing relationship, which is so wanted after business. American businesses mainly rely mostly on negotiation and contract laws rather than enabling a strong relationship with partners and clients. Chinese people call the practice guanxi, the practice assists in protecting the personal interest as it is not unheard of for a business subordinate to request superior favors in return for adjustments that may have been stretched in early allocating amid organizations. Thus, the cheese is inclined to evade opposition at all costs to save the business. On the other hand in the U.S., it is not disregarded for hostile discussions to happen as it reflected part of the negotiation, a procedure in an industry. Something that is not tolerated in the Chinese business ring.

Another common alteration is in the hierarchal conformation and role-plays out inversely in the two cultures. In China, the minor is anticipated to follow the trend of the superior irrespective of the difference in the idea that an individual may have. They take the decision of the superior in business to be final and ought to be valued at all prices. However, in the U.S. the culture allows subordinates to challenge their superiors at the workplace which assists in fostering innovation and openness. These elements of differences provide encounters for the two regions when it comes to the negotiation approach. It is helpful for the two parties to understand the differences particularly, as a country would want to expand its market in other regions.

Definition of Trade

Trade is an economic notion involving the selling and buying of goods and services, with payment made by a buyer to a seller. It is also the exchange of goods and services among different parties (González & Jouanjean, 2017). Moreover, trade can also occur within an economy amongst consumers and producers. Global trade allows nations to increase markets for both the goods and services that probably may be missing in that country. This is the major reason why an American resident can choose to purchase either an American, German, or Japanese car. Through international trade, the universal market holds greater competition that leads to more competitive prices, bringing a cheaper commodity home to the customers. This is clearly demonstrated in the figure below.

Definitions and nature of trade

Advantages of Global Trade

Country wellbeing. In many nations globally, international trade is very essential as a lack of these would lead to an increase in the number of deaths. For example, in countries like the United Kingdom and Japan, with their high population, it is impossible for these two nations to cloth, feed, and house their citizens. With their current population, the products produced by the country cannot cater to all the citizens and hence importation is a major activity there. Costs of self-sufficiency tend to be very extraordinary compared to importing. For the Americans, the early morning coffee would be termed as a luxury lacking global trade. The majority of the coffee consumed in America is imported from various parts of the world.

International trade creates financial wealth on a universal scale as every nation capitalizes on its growth and revenue on the products and services it's highly skilled at. This saves the country’s money on importation which would be expensive for domestic production. Ideally, a nation generates its revenue through the exportation of the excess services and goods that its local market does not necessarily need to other nations having a diverse advantage. The amount of money acquired through exportation is probably used in the importation of goods and services that are not produced by the nations that partake in a comparative advantage in the manufacture of goods and services. A good example is demonstrated by Portugal and England, which trade wheat and wine, on an international scale with numerous services and products.